Thousands in New Jersey and Pennsylvania face cuts in unemployment benefits

By Jane M. Von Bergen, Inquirer Staff Writer

Posted: March 27, 2013

As joblessness worsens in New Jersey and Pennsylvania, nearly 200,000 people in the two states - among two million long-term unemployed nationally - will see a 10.7 percent cut in their unemployment benefits next month.

The cut, which will show up in benefits for the week ending April 6, is yet another result of the sequestration - the series of cuts that began March 1 when Congress failed to resolve differences on how to reduce the budget deficit.

In New Jersey, 95,000 people will be affected; in Pennsylvania, 99,000.

"It's not the best policy to ask unemployed individuals and their families to make this sacrifice," said Rick McHugh, a staff lawyer with the National Employment Law Project, an advocacy group for the unemployed in New York.

"It also shoots the economy in the foot," he said. "Unemployment benefits have a very good stimulus effect, because people spend all of [them]. So, on humanitarian and economic grounds, there are better targets."

The cuts will not affect everyone who receives unemployment benefits.

The first 26 weeks of unemployment benefits are funded through the states, and those benefits will remain unchanged, with the maximum weekly payment at $624 in New Jersey and $573 in Pennsylvania.

Since the start of the recession, the federal government has paid for additional weeks. Those benefits, known as emergency unemployment compensation, or EUC, will be cut 10.7 percent.

Still unknown is the impact the sequester will have on other job-related programs.

"It is too soon for us to say what impacts the federal sequestration may have on that federal benefits program in New Jersey," Brian Murray, a spokesman for the New Jersey Department of Labor and Workforce Development, wrote in an e-mail.

"But," he wrote, "it is important to understand that the sequestration will not result in reductions to the many programs and services we offer through . . . our One-Stop Career Centers."

In New Jersey, the average unemployment check is about $382 a week, according to the National Employment Law Project. After the cut, it will be down to just over $341. In Pennsylvania, the average unemployment check is about $337, with the cut bringing it down to about $301.

The cut comes at a time of persistent long-term unemployment.

In February, when the national unemployment rate was 7.7 percent, four in 10, or 4.8 million of 12 million, jobless were out of work for more than 27 weeks.

The average length of unemployment was nearly 37 weeks.

Meanwhile, the employment situation in New Jersey and Pennsylvania is worsening.

New Jersey's unemployment rate was 9.5 percent in January, according to the most recent state data available from the U.S. Labor Department. That's up from 9.2 in January 2012.

The number of unemployed has also risen, to 442,700 from 418,500 a year ago.

In Pennsylvania, too, the situation has worsened.

In January, 536,600 Pennsylvanians were unemployed, up from 489,000 in January 2012. The unemployment rate rose to 8.2 percent from 7.6 percent.

Locally, unemployment is higher than the state and national averages, with 10.4 percent unemployment in Camden, Gloucester, and Burlington Counties and 9.2 percent in Philadelphia, Bucks, Montgomery, Chester, and Delaware Counties.